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Bitcoin, Ether rise amid ‘swoon-soar’ trading after SEC lawsuits against Binance, Coinbase

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Bitcoin prices rose in Friday morning trading in Asia, but failed to break back above US$27,000 after a rollercoaster week in crypto markets following the lawsuits by U.S. securities regulators against the Binance and Coinbase exchanges. Other top 10 non-stablecoin cryptocurrencies gained, with Polygon’s Matic token leading the winners.


Bitcoin strengthened 1.06% over the last 24 hours to US$26,551 at 7:00 a.m. in Hong Kong, making up some losses from earlier this week after the Securities and Exchange Commission (SEC) filed lawsuits against two of the world’s biggest exchanges, alleging dozens of of crypto tokens have been illegally offered and traded as unregistered securities. The world’s largest crypto by market capitalization is now down 1.26% for the past seven days after sharper declines earlier in the week, according to data from CoinMarketCap.

Ether climbed 1.1% to US$1,849, and logged a 0.98% weekly decline.

Polygon’s MATIC was the biggest gainer among the top 10, with a 2.69% rise, but it has lost 12.02% in value for the past week.

Binance’s BNB added 2.01% in the past 24 hours, the second-largest rise among the top 10, but is a big loser for the week, down 13.9%.

The total cryptocurrency market cap edged up 0.35% to US$1.1 trillion in the 24 hours through to 8:30 a.m. in Hong Kong, while daily trading volume dropped 35.3% to US$25.9 billion, according to CoinMarketCap data.

In a new court filing on Wednesday, the SEC said transactions involving several billions of dollars of customer funds moved through now-defunct Silvergate Bank and Signature Bank under accounts allegedly controlled by Binance officials, including chief executive Changpeng Zhao.

Sachin Verma, an accountant employed by the SEC, said in the filing that some of the funds were moved to accounts suspected to belong to offshore firms linked to Zhao and Binance, in various regions including the Seychelles, Lithuania and Kazakhstan.

Zhao tweeted on Thursday that this is “simply false” in response to a CoinDesk article that said US$12 billion of funds was sent to Zhao, citing the Wednesday filing.

“To the best of my knowledge, Binance.US had in total roughly US$2 billion in user funds. This number in USD equivalent fluctuates a little as crypto prices change. And declining as users withdraw due to recent news,” Zhao tweeted. “All user funds are accounted for, and never left the Binance.US platform (unless users withdraw themselves of course), ever.”

Gordon Grant, co-head of trading at crypto brokerage Genesis Trading, said that this week’s sweeping regulatory pronouncements “saw crypto realized volatility begin to rear its head.”

“After seeming months of coiling in an ornery, reptilian rip-rap price action, the successive Monday and Tuesday swoon-soar tandem on the back of Binance and Coinbase headlines preempted consternation, head scratching and, if nothing else, a recognition that the asset class remains habitually prone to lurid gaps in price action,” Grant said.

In an email, Le Shi, head of trading at Auros, a crypto market-making and algorithmic trading firm, said cryptocurrency trading volumes continue to “plumb the depths” last seen in the middle of the last crypto bear market.

CoinShares, a European crypto investment firm, said in a Thursday report shared with Forkast that while the SEC lawsuits seem to carry more severe implications for Binance, the potential impact on Coinbase and the broader crypto industry is significant.

“The charges insinuate that a majority of crypto assets should be categorized as securities, which would radically modify the regulatory landscape, potentially confining access to regulated Wall Street entities (assuming that they have the appetite once the litigation is over),” CoinShares wrote.

CoinShares added that the shift could potentially place the control of the crypto industry within the grasp of traditional financial institutions.

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